Essays on Activity-Based Costing: Is It Still Relevant by William, Stratton, et al Article

Tags: Survey
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The paper "Activity-Based Costing: Is It Still Relevant? by William, Stratton, et al" is a delightful example of an article on finance and accounting. The article talks about how the Activity-based Costing (ABC), which was developed to improve the accuracy of cost-profit measurement and decision support systems, was failing to provide desired results. The system has not been able to capture the complexity of most of the companies operations. Hence, they have stopped using it. A survey was therefore carried out by the Business Research and Analysis Survey Group (BRAG), to study the particular uses of the ABC method to find out whether it is still relevant or not (William, Denis and Raef 2).   Main Point: There are other organizations that apply the use of the ABC method and still achieve positive results.

The main point in this research is to change the mindset of many managers and organizations about the ABC method and show that it is still relevant, worth committing time and resources in and provide desired results with better implementation. Points of Interest: Among the points of interest is that the results of this study refuted many assertions that portray ABC as an unsuccessful costing method that is being abandoned by many organizations and practitioners.

The results also show that, out of 144 organizations that were involved in the survey, only 4 had used ABC and were no longer using it and only 22 knew about it and had never used it. The rest, 116 organizations had implemented ABC and were using it. It is, as a result, a point of interest as it disapproves of the fact that organizations are abandoning ABC.

Why the article is important to the class: this article is a very important one to the class as it plays a part in informing us about the relevance of the ABC costing system and its implementation. At the same time, it informs us about other alternative methods that organizations can use and whether they use them as their first choices or alternative choices. The article, for this reason, gives us the opportunity to decide for ourselves, through the benefits and drawbacks of ABC, whether the method is relevant or not.

A list of at least three points to discuss in class: Given an opportunity, I would wish to discuss some points in class and these points include: (a) The cost- and profit measurement method methods across the value chain, (b) ABC and the cost allocation, and (c) the Decision Support and the ABC method. I would discuss these points because, by discussing them and their benefits, we get to understand the relevance of the ABC costing method.  

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